Improving economy predicted for the Puget Sound

Jan 12, 2012

"It is a sunny day, with some clouds," says Dick Conway, a Puget Sound Economic Forecaster. "The more I study the Puget Sound economy, the more I am struck by the fact that the more it changes, the more it stays the same."

Conway, a go-to expert on the NW economy, spoke at the 40th annual Economic Forecast Conference put on by Enterprise Seattle, an economic development group that works to recruit and retain employers in the region. His comments were made at a packed gathering of business and government officials, at the Washington State Convention Center in downtown Seattle.

He makes his case with a history presentation, comparing charts about the Great Depression and the Great Recession. It's actually not so bad now as it was then.

"It's not exactly clear where we go from here," Conway says, "but unless someone throws a monkey wrench" into the economy, he is confident in a brighter future.

Here are five reasons that Conway thinks the future is bright:

  1. Boeing is showing strong employment, with the 737 MAX  and the 787 being built here, the labor peace pact, and strong bonuses.  Overall, it is a very nice scenario for the Puget Sound Economy.
  2. Job growth in the region is generally outpacing the nation. The strength of both Boeing and Microsoft causes a "multiplier effect," bringing more jobs with them.
  3. Retail sales numbers have been a pleasant surprise.  Conway predicts a 5.9 percent increase in 2012 and a bit more than 3 percent growth in 2013.
  4. Foreign exports are leading the recovery and Washington state is the nation's top exporter, thanks again to Boeing. (Microsoft is also a factor here.)
  5. The Puget Sound is home to many strong local companies.

Assuming that no flies get in the ointment, Conway predicts "growth at half speed," which translates to about 30,000 jobs per year. He does have concerns about the regional and state tax base though.

"The next governor of our state will inherit an improving economy, " he says, adding that he thinks Governor Gregoire has done a remarkably good job, under the circumstances, but that Washington still has "a broken tax system."

He thinks King County will have to hike its local tax rate to 13 percent by 2020, in order just to maintain the status quo. And he points out, in addition to being well-known and envied nationally for our relative strength, Washington state is also famous for one of the most regressive and unfair tax systems anywhere in the United States.